Coffee growers may soon get rain insurance cover
- The Economic Times - The world\'s first coffee-specific rainfall insurance scheme will be operationalised immediately by the Agriculture Insurance Compan
The world\'s first coffee-specific rainfall insurance scheme will be operationalised immediately by the Agriculture Insurance Company of India (AIC). AIC\'s chief manager KN Rao said the leading international reinsurance company Swiss Re, the World Bank and coffee growing nations like Nicaragua have evinced interest in the concept. The Union minister of state for commerce Jairam Ramesh said it will benefit 146,579 holdings in all 23 coffee zones of Karnataka, all 11 zones of Kerala and 9 of Tamil Nadu. Mr Ramesh expects other plantation crop-specific schemes to follow.
BANGALORE: The world's first coffee-specific rainfall insurance scheme will be operationalised immediately by the Agriculture Insurance Company of India (AIC). AIC's chief manager KN Rao said the leading international reinsurance company Swiss Re, the World Bank and coffee growing nations like Nicaragua have evinced interest in the concept.
The Union minister of state for commerce Jairam Ramesh said it will benefit 146,579 holdings in all 23 coffee zones of Karnataka, all 11 zones of Kerala and 9 of Tamil Nadu. Mr Ramesh expects other plantation crop-specific schemes to follow.
The scheme will be implemented by AIC (an autonomous entity affiliated to the Union agriculture ministry) in consultation with the nodal agency, the Coffee Board.
Since the scheme was recommended by a GoM in early January but only approved by the Cabinet Committee of Economic Affairs (CCEA) a few days ago, the bus has been missed both in terms of covering any deficit in rainfall for blossom showers (beginning March 1 and ending on April 15 for Robusta and April 30 for Arabica when the rain makes the coffee bushes' buds flower) and the subsequent backing showers (required to achieve the development of the fruit).
This year's blossom showers have started but are so far inadequate and sporadic. It remains to be seen whether the delay in implementing the scheme will hurt growers. The rainfall insurance scheme will be marketed from March 26 for the monsoon rains (the rainfall received between July 1 and August 31 for the coffee berry to grow in size).
The insurance payout will commence if the monsoon rainfall is above a daily level of 25 mm for seven consecutive days, with the maximum sum assured per hectare (ha) being Rs 6,000 for Robusta and Rs 8,000 for Arabica.
The premium could be between 8% and 12%, based on AIC's study of the historical rainfall pattern in each coffee zone for 25 to 30 years, simulated for 100 years. Subsequently, the scheme will be applied to the blossom and backing showers for 2008 where, the lower the historical rainfall below the required level for blossoming and subsequent development of the coffee berry, the greater the risk and the higher the premium.
Mr Ramesh and Coffee Board chairman GV Krishna Rau said there will be a 50% subsidy on the premium amount for small growers, subject to a per-ha ceiling of Rs 2,000 for Robusta and Rs 2,500 for Arabica.